What BNPP Can Tell Us About Halkbank: Why Running Afoul Of U.S. Sanctions Regulations Is Bad For Business
By Kemal Su
Mehmet Hakan Atilla, a high level banker at the Turkish state-controlled Halkbank, was convicted on January 3, 2018 of helping Iran circumvent international sanctions and gain access to billions in restricted petrodollar funds.[1] Throughout the trial, witnesses described a conspiracy to avoid U.S.-imposed Iranian sanctions that was allegedly supported by the highest levels of the Iranian and Turkish governments. Although six (6) other banks were named during the trial, Halkbank appeared to be at the center of the conspiracy. While the guilty verdict applied only to Mr. Atilla, the fallout for Halkbank is only just beginning. If the U.S. government finds that Halkbank engaged in wrongdoing, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) can impose a range of potentially debilitating penalties that will affect the future viability of the bank and may trigger a Turkish financial crisis. In order to understand what actions the OFAC may take, it is useful to have a look at what happened when U.S. authorities investigated BNP Paribas SA (BNPP).